Housing Market: Robert Shiller Still Wary


When Robert Shiller, Yale economist and co-creator of the revered S&P Case-Shiller index speaks, the real estate world listens.

The last time the Case-Shiller housing price index came out,
12 of the 20 U.S. cities tracked showed decelerations -- meaning prices in those cities have been flat for more than a year. With the first-time homebuyer'scredit in our rear-view mirror, Shiller says that he is worried the housing market could see a downturn in prices because no one knows what new stresses lie ahead, especially with newcomers in Washington.

"The homebuyer credit did create an end to declining home prices, but it didn't create a strong enough recovery," Shiller told GuruFocus.

Then there's hedge fund titan John Paulson, who thinks everyone ought to be out there buying homes and gearing up for housing inflation. The man who made billions betting against the sub-prime mortgage market said just this summer that we are in the midst of a sustained recovery, with a less than 10 percent risk of a double-dip recession.

Shiller versus Paulson: Whom to believe?